Wednesday, January 25, 2012

Proposed LIPA Feed-In Tariff Bills/Pilot Project


A PV system on the property of the US Energy lab at Brookhaven, on Long Island, NY
from http://www.lipower.org/company/powering/solar-bp.html

Introduction
Assemblyman Fred Thiele (Independent, AD2) who caucuses with the Democrats (used to be a Republican - see http://en.wikipedia.org/wiki/Fred_Thiele) and Senator Ken Lavalle (Republican, SD1), both located at the east end of Long Island (the Hamptons) have introduced a solar photovoltaic (PV) Feed-In Tariff (FIT) proposed legislation. These bills are A7178 and S4862, and they specifically site the success of Germany and Gainesville, Florida (Gainesville Regional Utility, alias GRU) with regards to PV job creation - both manufacturing and installation. We wish them luck in their endeavor, and hopefully this very limited "testing" in NY State will be expanded. After all, this is the windiest part of NY's flat lands (only a few mountain tops/ridgelines in the Catskills and Adirondaks are windier), the offshore waters are shallow AND windy, there is an awesome tidal resource, and this part of NY has some of the most expensive electricity - especially in high demand days in the summer. Long Island holds the record for the most expensive hourly price - 99.5 c/kw-hr in August of 2006. Some PV at the time would have helped....

The Assembly and Senate Bills are apparently the same (needed for passage) - see http://assembly.state.ny.us/leg/?default_fld=&bn=A07178&term=2011&Summary=Y&Text=Y for details. As with a lot of legislation, often the language points to questions, such as what this portion actually means:
48  NO MORE THAN ONE HUNDRED MEGAWATTS OF  ALTERNATING  CURRENT  RATED
49 PEAK ELECTRICITY IS SUBJECT TO THE REQUIREMENTS OF THIS SECTION.
Discussion
In the 1970's, the Long Island Lighting Company (LILCO) monopoly decided to build a 1.1 GW nuke plant (a clone of the Nine Mile 2 unit and of the big ones at Fukushima) at Shoreham (see http://en.wikipedia.org/wiki/Shoreham_Nuclear_Power_Plant), despite the problem of no possibility of timely evacuation of the Long Island/NY City/Connecticut coastal regions if there was an accident. But, they proceeded on their own corporate version of this Hellbound Train, no matter what. The Three Mile Island partial core meltdown added billions in revamps/delays/design modifications, and LILCO still had no answer to the big "What If?" questions, especially in regards to evacuation. By 1986 - and especially with the April 1986 Chernobyl disaster freshly imprinted in their minds, over 74% of LILCO ratepayers were opposed to this $6 billion plus "platinum plated turkey". Gov. Mario Cuomo actually ordered NY State officials NOT to approve of any LILCO sponsored evacuation plans. The plant never did receive full power operating permits, and so the plant could not operate.

In effect LILCO had flushed $6 billion PLUS INTEREST of shareholder equity/company capital down the proverbial sewer, and they were the walking corporate dead. In return for agreeing to decommission the plant, NY State formed LIPA - the Long Island Power Authority (http://en.wikipedia.org/wiki/Long_Island_Power_Authority) - in 1985 via the Long Island Power Act. It acquired the assets (and debts) of LILCO in 1985, as well as the transmission system in 1988. As such, LIPA is a municipal electric utility (MEU) owned by not the Long Island ratepayers/community but by the people of NY State via the state government. A big part of their job was to pay off the Shoreham debt via monthly charges onto ratepayers. LIPA has about 3 million people serviced by them (1.1 million customers), and they are one of the biggest MEU's in the U.S. It's 2011 revenues were around $2.8 billion, mostly derived from sales of transmitted electricity averaging around 2.5 GW (initial 9 months of 2011 was 2681 MW).

In the proposed bill, only solar PV is covered. Long Island has a tidal resource of up to 2 GW with the water that flows in and out of Long Island Sound (about a 10 foot height range or more) twice every day. It also has a great wind resource onshore (the region is really flat and next to some decently windy ocean), and then there is a huge offshore region of shallow waters with an average wind speed of around 9 m/s at hub heights (see http://www.wagengineering.blogspot.com/2011/12/ny-new-years-resolution-real-wealth.html). Odds are, some biomass and biogas also could be tapped. But maybe these other renewables that are actually lower cost electricity production techniques than solar PV can be incorporated in a subsequent bill. After all, Long Island could completely power up on an average basis, and even be a net exporter of electricity to NYC, and via NYC/underwater cables across Long Island Sound, it can tap into a lot of deferred hydro or pumped hydroelectric stored energy.....

Anyway, this bill is a bridge to SOMEWHERE, and it is a start. LIPA can do this because they do not always have to choose the cheapest and most foolish/most polluting power price for any given hour, unless the management chooses to do so. They can actually incorporate human values, such as local real wealth creation, job growth and the real cost of CO2 pollution (which is more like $85/ton of CO2 pollutant per the Stern Review Report - http://en.wikipedia.org/wiki/Stern_Review), the real costs of dependence on depleting fossil fuels (alias natural gas and coal).

And of course, Long Island is smack dab in the cross-hairs of the Global Climate Change ... er .. war (of words, of philosophy, of science versus ignorance, or petrochemical greed versus our collective common good, etc). That is because slightly warmer atmospheric temperatures worldwide lead to significantly warmer temperatures over Greenland and also in the ocean waters in the Arctic Ocean and Atlantic that are next to Greenland. This leads to melting waters on the Greenland land mass/from its ice-sheets that can be a mile thick or more. The ice-melt water borrows through the ice/sinks to the land, and then flows to the ocean, in the process lubricating the land-ice interface. And this can lead to massive "landslides" of ice. Ice is also brittle - like glass, you can compress it, but you can't stretch it without it breaking. Ice sheets lubricated by a water film that are located on a sloping land mass will crack apart under their own weight, and start moving pretty fast. So within a matter of a few years, a lot of Greenland's stored ice can slide into the Atlantic, causing all kinds of misery. Notably, a 5 meter rise in ocean levels. The details can be found in Jim Hansen's latest article: http://pubs.giss.nasa.gov/docs/notyet/inpress_Hansen_Sato.pdf

That would not be good for a lot of locations, but especially Long Island, whose highest elevation is around 125 feet above present sea-level. The island is really a big sand-bar, and the eastern end is particularly flat. So, converting a lot of NY State's most valuable real estate into a fish farm is economically the equivalent of "biting the big one". Dumb on an epic scale is another polite way of putting it.

Conclusion
FITs deliver more renewable energy, more jobs and more economic growth for a given investment than any other renewable energy system yet devised, all at zero cost to the taxpayer. They democratize investment opportunities, ending the defacto monopoly of the super rich with lots of passive income. In fact, FITs will raise governmental income (tax revenue) at constant tax rates because they stimulate economic activity via by-passing useless financial gambling and risks associated with unknowable future electricity prices. And that's pretty cool.... and if it takes this baby-step on Long Island to get the ball rolling, well, why not. But, we don't have eternity to wait - the clock is ticking, and Greenland's ice is melting at an accelerating rate (exponentially so, to). So hurry up about it, eh?

DB

Friday, January 20, 2012

Your NY Electric Bill Explained - And What It Means

Introduction
It now can be logically argued that we now have less freedom (= less rights) than even a decade ago - for example, via indefinite detention, "legal" assassination of Americans, (lack of) on-line privacy, the "death" of "habeus corpus" and warrantless wiretapping. And yet one local (to NY State) hard won right is the freedom to vote with the money you spend on your electricity bill as to how you want that electricity made. Do you want it made via polluting or non-polluting means? You get your choice - by a way that maximizes the probability of a Fukushima/Chernobyl event (and we've had some really close calls in NY State), or way with a zero probability of such a horror? Do you want that electricity made in a way that has minimal CO2 pollution, or maximal CO2 pollution. After all CO2 pollution (CO2 made by burning fossil fuels) is the prime driver for Global Climate Change, which will NOT be good for us, by a long shot. About 40% of the CO2 pollution made in our country comes from burning coal and natural gas to make electricity. How about electricity in a way that maximizes NY State job creation, instead of in a way that exports the maximum quantity of money (out of state corporate profits, fossil fuel expenditures/corporate rentier profits)?

Discussion
Wow, all that via that once a month ritual of paying a (usually) corporate monopoly for the monthly allotment of electricity, and which most people don't associate with freedom at all (it's a money expenditure bill, after all, and who wants to pay that!). So, let's use my electricity bill as an example of a residential bill. There are about 7 million residential customers in NY State, as well as about 1 million "commercial" and 80,000 "industrial" customers, and in 2009 (the last with the readily available data) about $22.4 billion was spent on electricity purchases (15.52 c/kw-hr average delivered price) - see http://205.254.135.7/cneaf/electricity/st_profiles/new_york.html. Of that, about one third of that (maybe $8 billion) was actually paid to the people who generated the electricity. And it is in that $8 billion/yr where you as a customer can choose to direct your purchases. Only a very tiny percentage of NY'ers actually do that, unfortunately.

So here is a breakdown of my monthly bill (Dec 2011), total household usage of 247 kw-hr, averaging 332 watts, all for $56.07:

Delivery Services
Connection ................................. $16.21
Delivery ...................................... $12.87 5.268 c/kw-hr
Delivery Adjustment .................. $ 4.30 1.743 c/kw-hr
Incr State Adjustment ............... $ 0.76 0.307 c/kw-hr
SBC/RPS .................................... $ 1.35 0.5452 c/kw-hr
RDM ........................................ - $ 0.75 - 0.305 c/kw-hr
Transmission Adj Rev ............... $ 0.36 0.144 c/kw-hr
Tariff Surcharge ......................... $ 1.85 5.26316 %
Sales Tax .................................... $ 1.76 4.75 %
Subtotal .............................$38.71

Supply Services
Electricity Supply ....................... $ 9.46 3.831 c/kw-hr
Merchant Function .................... $ 0.43 0.174068 c/kw-hr
Renewable Service ..................... $ 6.18 2.5 c/kw-hr
Tariff Surcharge ......................... $ 0.50 3.09278 %
Sales Tax ..................................... $ 0.79 4.75 %
Subtotal ............................. $17.36

One gripe commonly expressed about electricity bills is the "nickel and diming" those $0 to $2 per item things, that add up to 12.6% of this bill. Total taxes are about one third of the "nickel and diming" that happens when those fractions of a penny per kw-hr are added up and multiplied by 247 kw-hr. The actual generated electricity could be as low as 19% of the total bill when the "Renewable Service" (Green Tags) is excluded, which would have saved all of $6.18. It is those dollars which go to the wind turbine owners - in this case, ENI, and Italian company that owns the initial Wethersfield NY wind farm (10 x 660 kw units that were installed in 2000), in addition to the "average spot market price" for the month of December 2011, which was 3.206 c/kw-hr. Thus, ENI was raking in 5.706/kw-hr, or $14.09 last month from me, and the rest either went to NY State ($2.55) or National Grid ($39.43), our British owned local distribution monopoly whose abbreviations are, fittingly, NG (beats our natural gas monopoly, National Fuel Gas, abbreviated ever so appropriately as NFG).

In other words, 4.75% goes to NY State, 25.1% goes to the wind turbine owner who, on average, supplies my electricity, and 70.3% goes to the foreign owned monopoly who owns the wires and does the billing. Even if the cost of electricity generation was that of NYPA's Niagara Power Project (0.2 c/kw-hr) - where I would pay 50 c/month for 247 kw-hr/month - that still leaves over 75% of the (existing) bill for the "other" category unaltered.

Like most WNY residents, most of the bill for December 2011 was in the "Delivery Services" category, and not much was in the "generation" part - and that's where the pollution does or does not come from. Or that nasty radioisotope poisoning potential - Chernobyl did in or 970,000 people via cancer and related nasties, as well as significantly messing with the genetic code and immunity systems or 60 million Ukranians and Belyrusians, where less than 1 in 10 children born has a "normal" health profile. Yum.....

There are very few NY'ers who take advantage of the "electricity choice", and instead use the "default", which, for National Grid/ex-Niagara Mohawk, is heavily nuke oriented (nukes were the prime cause of NiMo's "corporate dead man walking" situation that began in 1988 and ended up in their de-facto bankruptcy/pennies on the dollar sale to National Grid in the early 2000's). Less than 1% of residential customers, and close to that for commercial (includes NY State governmental units) and industrial entities, use the "vote with your dollars" right. In theory, Gov. Pataki's Executive Order 111 (a massive unfunded mandate/wish fullfillment/empty promise), requires at least 10% of all electricity sales to NY government entities are non-pollution based (in effect, wind or landfill gas), and SUNYAB is about the only institution that even bothered to try to meet the EO 111 decree to a significant extent.

The Wrap Up
So what can be concluded from this minute/pathetic participation rate, and also the completely never budgeted (if you want it, try paying for it) E.O. 111? Renewable electricity in NY can be home-grown (recycles money instead of exporting our wealth), once installed is non-polluting, and poses zero threats from fall-out and catastrophic climate change. And for a pretty nominal cost, you can make the world a better place and provide some American's with good jobs, and businesses with a way to exist for the betterment of most of us, as opposed to extracting all available wealth and leaving us as an emptied shell in "the dustbin of human history".

Now, some will say they don't know about the "Green Tags" option (and there are better ways to do this, such as Feed-in Laws, but since we don't have them in NY, "Green Tags" are it for now). Some will just not care about trashing the climate control system with CO2 pollution - as long as today's electricity price is dirt cheap, NOTHING else matters. Some could care less about exporting dollars to import fuels and send off exorbitant profits to the mothership for NY nuke owners, and just discount the "NY Fukushima Scenario" by invoking the concept of perpetual luck.

But most people get uncomfortable when asked the question of "If your part of salvaging a viable climate for the next few generations might cost $5 to $20/month, would you do it?" - the idea of trashing the prospects of their children and grandchildren for their own short term gain and/or comfort is unsettling. It's just best to push that question into a dark corner, leave it there undisturbed, and forget about it. After all, given what comes across as news these days, (here is an rare exception - http://UpwithChrisHayes.msnbc.msn.com/_news/2012/01/14/10157366-saturday-2nd-hour-jan-14 ) it's not at all difficult to ignore the climate problem/economic problems coming from pollution based electricity. For most people, such questions will never be asked. "Move along now, nothing to see here..."

Now some will pose the "great diversions" - such as, why not tax CO2 pollution for its real cost ($85/ton of CO2 pollution emitted), and why not let nukes pay their full share of catastrophic insurance (if nuke owners had to do this, they would just shut them down ASAP, as there is no commercially viable way to do this - see http://www.wind-works.org/LargeTurbines/Nuclear%20Expensive%20and%20Uninsurable%20Say%20Studies.html). Either of these actions would raise generated electricity prices from coal by between 8 to 10 c/kw-hr and from gas by 5 c/kw-hr, rendering all more expensive than onshore wind turbines, and shocking the economy something fierce if done all at once. Actually, that's why Feed-In Laws are so attractive - all pollution sources can be replaced via the "renewables get grid access preferentially", and there is no need for cranking up pollution based electricity prices (now the bulk of our supply). In these, the more expensive (until the capital investment is paid off) renewable electricity can get blended into the grid mix in a way that minimizes the speculative rip-offs that are possible in "marginal pricing systems". But, if you can't figure out how to "vote with your money" via "Green Tags" - see http://www.buffalowind.org/node/12 - even comprehending Feed-In laws is probably going to be a stretch. And as for getting the Federal law change (alter Section 210 of the 1978 PURPA law with a measly 132 words) needed to allow a FIT system in states - well, not good. And even if that does happen (it's zero cost, after all, and not "State's Wrongs" but "State's Rights"), then try getting the NY Governor, NY Senate and NY Assembly to do the right thing. Well those all have to be done, but you can immediately vote with your dollars today, or at least by the end of the month. Besides, a big market share moves politicians, as this is actual money talking - it won't work on all of them, but maybe enough of them. Hey, maybe even the guilt trip about them trashing the world's climate so bad that their descendant's will forever curse them something fierce might change a couple of legislative minds...

In the immortal words of the Floyd dudes:

"Breathe, breathe in the air
Don't be afraid to care ...."

(Dark Side of the Moon - "Speak to Me/Breathe" - try out this one:
http://www.youtube.com/watch?v=fx6iIp-PvnY)

DB

Wednesday, January 18, 2012

Lake Ontario Idea

See http://www.principlepowerinc.com/products/windfloat.html for details

This is a picture of a big deployment of wind turbines in deep waters, sometime in the future. So far, just one of these units has been deployed off of the coast of Portugal, in deep waters. Despite the ungainly look, these floating platforms are very stable (it was designed by former US Navy captain and close associate of Admiral Rickover (US nuclear Navy fame), who also was instrumental in starting up the US wind industry with his MIT course in the 1970's). It has been operational for about 2 months, and seems to have made it past this awesome and massive winter hurricane that slammed England with 165 mph winds. This foundation can be assembled in harbors, where the cost to do this is much less expensive than it is to assemble a wind turbine far offshore at the site where it will be used. The unit gets anchored to the ocean or lake bottom, wired up to the offshore substation/other turbines, and then its "sit back and make some money time".

It turns out that in shallow waters, it is less expensive to use other foundations. For Lake Erie, the "gravity" or "caison" one seems really appropriate - this is a 1800 ton or so concrete structure that is floated out to the site, then carefully sunk to the bottom; then the wind turbine is placed on the part sticking out of the water (these were used for Copenhagen harbor's wind farm). Another popular style is the monopole - ideal for those 5 to 25 meter depths - which is a BIG piece of pipe (now 5 meters, or 16 feet in diameter with a 3 to 4 inch wall thickness). A variety of tripod or tetrapod ("jacket") style units are good for perhaps 50 meter depths - which also need 3 or 4 smaller monopoles rammed into the seabed, with the foundation platform placed on them. And there is also the "jack-up platform", which has been used in thousands of offshore oil and gas platforms in the 10 to 100 meter range. So many options..... the judge of what will be best is, of course, the cost to do this. Capitalism at work.... along with ingenuity, skill and a need for quality done on time and at or under budget.

Foundations amount to roughly half of the price of offshore wind turbines, so economies of scale that can lower the per unit cost of foundations are important. This is where mass production can come in handy. The raw material (for example, for a 500 ton monopole), might only be $500,000 in steel, but the entire foundation system and associated labor can go for $8 million or more for a 3.6 MW wind turbine, where the total installed cost is likely to be $16 million a pop. This is not for amateurs, and big stakes can be involved with projects now typically between $1 to $2 billion. So maybe a Detroit style assembly line would come in handy.

Lake Ontario has an average depth of 89 meters, or about 282 feet, and a lot of the shallow parts of this pond are in Canadian waters, near the mouth of the St Lawrence River. Most of the 2500 square miles of the lake that is "U.S. territory", are, in offshore wind terms, "deepwater". There is some shallow water near the shore, but near the shore, wind speeds tend to slow down:
from http://www.glerl.noaa.gov/data/bathy/ont_bathy.gif

Add that to the lake Ontario wind speed map:
from http://www.awstruepower.com/wp-content/media/2010/09/NYSERDA_AWST_NYGreatLakesFS.pdf, pg 80

The brown color that is the bulk of the offshore portion of this map signifies average wind speeds in the 8 to 8.25 m/s range at 80 meters above the water. Half of Niagara, Monroe and Oswego as well as all of Orleans, Cayuga and Wayne County's waterfront has this combination of very decent wind speeds and deep water.

The normal rule is between 10 to 20 MW of capacity per square mile of water surface. Getting 2000 MW of wind capacity would thus need about 100 to 200 square miles of surface, or between 4% to 8% of the US part of Lake Ontario's surface. And that would produce around 800 MW of electricity, on average - in other words, it could readily produce more electricity than any one of the 3 smallest nukes on the NY Lake Ontario shoreline. Replacement of all of those nukes (Ginna, Nine Mile 1, Nine Mile 2 and FitzPatrick) would need about 2800 MW delivered, or about 7000 MW of offshore capacity, which would need about 2300 units of 3 MW each, or 350 square miles of offshore array. Bigger turbines would result in bigger floating platforms, though less platforms and turbines to get the same energy output.

Of course, eminently feasible, especially when the offshore arrays are connected to pumped hydroelectric storage units in the finger lakes, and also to NY City for a market for this electricity. And that gets rid of upstate NY's very own Fukushima/Chernobyl issue. Sounds good to me. Now all we have to worry about is the nukes in Ontario, Ohio and Michigan....

But the cost?!?! Well, for a bit, let's forget that somebody's investment is another person's job, and let's say the installed cost is roughly $4.5 million per MW of capacity. That's about $31.5 billion, but it can be spread out over a number of years (10 to 20, for example); let's assume 10 years. That's $3.15 billion per year worth of capital investment, or about 48,000 job-years/yr of direct jobs (assuming most of the project is sourced in the region/in state/near state. That electricity at 280 MW per year added (delivered version) would come in between 15 to 20 c/kw-hr, and it would gradually raise everyone's electricity price (but that also pays for close to 50,000 jobs), all of about 0.22 cents/kw-hr per year. Oh well that's the cost of getting rid of upstate NY's potential Fukushima problem (those are all GE boiling water reactors, too, just like at Daiichi....). And whether these are privately owned and financed (high cost version), or owned by the people of NY State via NYPA and are all bond financed (low cost version), the job creation potential is still there, waiting.

Just like thousands of upstate NY'ers, waiting for a job, or a job that depends on these primary jobs becoming a reality. Meanwhile, on the northern side of the pond, Windstream Energy (http://www.windstreamenergy.ca/), the only company to receive a FIT contract with Ontario for an offshore wind farm (300 MW one near Wolfe Island, in the shallow northeast part of Lake Ontario), is pressing on regardless of whether Ontario has a moratorium on offshore wind turbine arrays or not. Check out http://www.offshorewind.biz/2012/01/19/windstream-energy-to-build-ontarios-first-offshore-wind-farm-canada/ and http://www.offshorewind.biz/2012/01/19/windstream-energy-to-build-ontarios-first-offshore-wind-farm-canada/. They are busy lining up subcontractors and at the same time working on the Liberal and New Democrat members of Parliament (the Conservatives are a lost cause and seem terribly "whored out" to pollution sourced energy generators - is that universal or what?) with the virtues of that combination of electricity made without pollution, nuke "oops" probabilities and jobs, jobs, jobs, not to mention some perceptible increase in sales of made in Hamilton, Ontario steel. And while there is pollution associated with the manufacture the components and assembly of the wind farm, the energy payback is typically more than 30:1. One unit invested to get a return of 30 in a 25 year time frame. Who wouldn't want that?

And lastly, a word from the fishes.... Fish like offshore piers and floating platforms, and so do all the birds that depend on the fish for food, or the people who like sport fishing. Tourism... it goes well with offshore wind farms. Maybe they can even have sailboat races through the wind turbine array - more tourism. But above all, good for cows and pigs, too, as one of their favorite mottos is "eat more fish..." After all the nasty things we have done to Lake Ontario and it's aquatic residents, can't we at least be nice to them and provide some happy hunting waters for Lake trout and similar big boys....


So, support your local lake trout! Get an offshore wind farm located in a Great Lake near you. And hurry up about it, while we still have a viable climate that let's trouts live in the Great Lakes......

DB

Wednesday, January 11, 2012

2011 - The World of Wind Energy Part 1


From http://www.city-data.com/city/Sheldon-New-York.html - after all, no city webpage is complete without a nifty picture of a wind turbine in town (you also can click on http://www.city-data.com/picfilesc/picc50574.php). This is one of the "Sheldon High Winds" 75 unit array (a GE 1.5 MW x 77 meter long blade on an 80 meter tall tower) in Sheldon, NY, near the Wyoming/Erie County border. And it's just so darn cool looking.... as well as partly powering up the very device you are reading this article on if you are in the Western NY area when this is occurring. And, as Mylie Cyrus is rumored to say, "And that's pretty darn cool, too..." BTW, hey City of Buffalo government, what's the problem here? When are you going to join the 21st century?

Anyway, 2011 is gone, and for many of us, we want to keep it that way. The pretty poor economic situation around here does leave one hoping for a better 2012, though in theory, it could be worse (after all, in January 2009, the economy was shrinking at a 7.5%/year rate or more and three quarters of a million Americans were losing their jobs per month - eeks!). But, despite the less than desirable economic situation, it looks like about 45 to 50 GW of new wind capacity (worth about $US 70 billion) was installed last year worldwide, bring the worldwide total to near 245 GW (a GW is a gigawatt, or 1000 megawatts (MW)). If every country had the wind turbine performance of the US, that would be about 73 GW of average delivered output, or the equal to 73 Nine Mile 2 nukes (for 2010 anyway). So, still think this is a trivial pursuit of some idealistic hippies (and yes, that is so true) and no one else? Of course, not every country has such a wind turbine performance (China is a total slacker in that regard, and they now have about 25% of the world's wind turbine capacity, with almost all of that "Made in China", too). But even with that caveat, wind is a big source of jobs, economic development, invested wealth as well as delivered electricity made with no possibility of "nuke belch" or CO2 pollution, and depletion of the resource is not a real issue.....

In the US, about 8 GW was installed last year, bringing our total to about 46 GW capacity, and a delivered average of about 14 GW, or 14 nukes that deliver 1 GW. All indications are that over 10 GW will be installed in 2012, as developers rush to get their projects finished before the Federal incentives disappear on December 31, 2012. Consider that to be "Pumpkin Time" in a renewable energy version of Cinderella.... More and more of the ones installed in America are being made in America, even if a lot of the companies making them are European (Vestas, Gamesa, Siemens, REPower, Nordex) or Indian (Suzlon). More importantly, the supply chain is filling out. Making wind turbines is very metalworking intensive (sort of related to cars, trucks and locomotives), and states like Michigan and Ohio are pursuing these opportunities intensely, as are our neighbors in Ontario and Quebec.

As for NY State, still pretty much zip-ola on the wind turbine manufacturing jobs front; that is where most of the jobs associated with the wind biz are situated and the most desirable ones as far as economics are concerned. It appears that the NY State capacity is now near 1350 MW, and will be close to 1800 MW by the end of 2012, delivering more electricity than the rated capacity of the Huntley (400 MW) coal burner (though there should be to replace the output of the Dunkirk unit (540 MW)). 1800 MW of wind turbine capacity is roughly $3.5 to $4 billion invested, and there SHOULD be a lot of manufacturing jobs associated with that, but NY State officials have instead stressed the pollution-less electricity made, the avoided fossil fuel combustion (essentially, all natural gas), the avoided CO2 pollution as well as the construction and installation jobs that temporarily were needed to install the roughly 900 turbines so far. At present, that is of SECONDARY importance; manufacturing job creation should be of PRIMARY importance, as that leads to other permanent job creation. Oh well, instead, we stress the booby prize, the "Miss Congeniality" award of economic development, while Ontario, Quebec, Michigan, Ohio and even Pennsylvania have their eyes on the real prize...

World wide, Europe again installed about 10 GW (total now near 90 GW), and the average size of new onshore turbines is evolving to a 3 MW per turbine rating. Europe is now the technological leader in this field - it is where India and China buy and/or steal most of their wind technology from these days. Over 1 GW of offshore wind capacity was installed, and 5.5 GW was under construction, with over 200 GW "permitted" or "under consideration"; this sub-field is set up for rapid exponential growth, with 40 GW anticipated to be installed by 2020. Europe has targeted offshore wind as a major business/job growth sector, with about 150,000 people anticipated to be employed in it by 2020. The decision by Germany to cancel its nuclear option after the first Fukushima reactor hydrogen gas explosion has intensified the offshore push. Furthermore, the strong connection between the high skilled, high quality manufacturing sector employment and wind turbines is firmly established. Any attempts to impede wind turbine development will now get an intense push-back from the banking/finance sector, the business sector and organized labor, as well as the "enviro's".... The design of a North Sea "super-grid" of at least a 10 GW rating to move the offshore derived electricity to all of Europe is also underway (also a great Keynesian-like economic stimulus...).

China has manufactured another 20 GW of wind turbines in 2010 (see http://www.worldfutureenergysummit.com/Portal/news/4/9/2011/world-wind-energy-association-report.aspx), bring their total to 65 GW. However, over 20 GW of that has yet to be connected to the grid (the turbines are installed, but not wired in...). Of the turbines that are grid connected, the average output is in the 11% of capacity range (about 38% of the US average, or less), and this is not due to them being installed in poor wind regions. Most of this problem is due to either poor grid quality and/or especially poor manufacturing quality. Part of this is a result of China's reason for making and installing these - they want steel, concrete, machine tools, the components (generators, gears, transformers, transmissions, bolts, rebar, etc.), concrete and labor to be consumed, and they really don't care what the end result is, though they really would prefer that it was exported. But since much of the technology of their turbines is either licensed or stolen and is of poor quality, their export options are limited. One "niche" they are pushing is the use of permanent magnet generators (PMG), which are slightly more efficient than "doubly fed" electromagnet based generators, since the preferred magnets are rare earth based (especially neodynium based - the so-called NIB materials - see http://en.wikipedia.org/wiki/Neodymium_magnet). However, the main benefit of PMGs is that they can be used in "poor quality grids" and that they can be started up without an initial use of grid-based electricity needed to magnetize the rotor electromagnet in the "doubly fed" generators (and China has significant grid quality issues). Another issue in China is electricity cost - since they have essentially no pollution control costs (no controls, filters and scrubbers - no cost!) on coal based electricity, it is very cheap (so is the labor to extract this coal; coal mines in China can be worse than horrid prison camps). Manufacturing things that use a lot of electricity (especially solar panels) can be really low cost when the electricity is low cost, and lower cost than everywhere else (labor, pollution control and electricity, especially) is an essential core part of the Chinese mercentilistic export strategy (i.e. drive everyone else out of business/monopolize the business/keep restive populations busy by working them hard at barely survival wages).

So this is a bit of a problem for China. They need electricity production to grow, and wind turbines can supply this at ~ 6 to 10 c/kw-hr, and it uses neither coal or natural gas in the process. China has arrived at "Peak Coal" - they now must import some coal from countries like Australia, Indonesia, Mozambique, South Africa and the U.S. to make up for what they cannot produce domestically. And China mines a lot of coal, but they burn even more. Coal is a depletable resource, and China is burning through the easy to extract coal at a prodigious rate - over half of all coal consumed in the world is burned in China - mostly for electricity, heat, steel and ammonia production. China now competes with India (who can only supply about half of their needs) on the world market for coal. This is why U.S. east coast coal prices are now $80/ton versus $50/ton these days; China and India now import coal from the U.S. (mostly east coast) at a rate of close to 150 million tons/yr - or 15% of all coal produced.

Wow, what a trade - we export coal to "Chindia"and import Walmart sold manufactured crap from "Chindia", as well as iPhones, TVs, tools, iPads, computers, apparel and shoes as well as solar panels. China would love to add wind turbines to that list, but there is the quality problem, which they hope to overcome via using cheap Chinese sourced credit (in effect, another Walmart curse - the profits from the cheap Walmart crap are used to finance purchase of made in China wind turbines..).

Development Trends
One nifty world wide trend is that wind turbines are going world wide - such as Brazil's 2011 big bulk purchase, the developments in one of Mexico's "wind tunnels" (Oaxaca), South Australia's wind surge and the recent Morrocan 850 MW tender. FYI - India now has 14 GW of installed capacity, and they are also headed "offshore", where their mediocre land based wind resource can be significantly augmented. South Africa also recently announced several new wind projects (coinciding with the Durban conference). Canada is also developing at least 1 GW/yr, and that will accelerate with Ontario's FIT pricing system (and now, Nova Scotia).

In general, wind turbines have been getting both bigger and more dependable. Except for China, competition between manufacturers, combined with Feed-In Tariffs, is pushing the technology in many good ways. Of late, Low Wind Speed Turbines (LWST), which can be roughly classified as having a power ratio (swept rotor are divided by generator rating) of 4 m^2/kw or more have been accounting for significant sales. Augmenting those are "medium wind speed turbines", with a power ratio between 3 to 4 m^2/kw; they have been getting larger, and offshore versions of these are now offered (such as the Siemens 3.6 MW x 120 m rotor diameter model, and the Vestas V112). Many manufacturers now offer turbines for onshore installation of 3 MW or more (Siemens, Vestas, REPower, Enercon, Gamesa, WinWinD, Fuhrlaender), and the 2.5 MW size is now COMMON. In the U.S., towers taller than 80 meters are now available (these go with LWST and bigger rotors). In 2012, some may even be "hybrid towers" that are common in Europe - a lower concrete section and an upper steel, one, with heights of 100, 120 and 140 meters available.

Finally, there is the real push to make onshore wind a major factor in Europe. Wind speeds average over 9 m/s in much of the North Sea (and often greater than 10 m/s), and above 8 m/s in much of the Baltic Sea. Since the amount of power production is proportional to the cube of the wind speed, a given region at 10 m/s can provide over 4.6 times as much power as can a zone with a 6 m/s wind resource, for the same rotor area. Plus, transporting big blades and towers is easier by water than on land, and in general, there are no neighbors offshore. Offshore wind has been demonstrated for over 20 years at commercial scale, and the challenge has been with foundations, underwater cables, offshore transformer stations as well as making and installing these on time and under budget. In general, that is NORMAL now, unlike for nukes, where cost over-runs seems to be the rule and not the exception. Offshore wind derived electricity is now cheaper than making electricity with a new nuke, and after Fukushima...

The full effects of the Fukushima disaster on Japan have still not been felt. TEPCO, the owner of the Daiichi complex, was one of the biggest companies in the world, and now it is "the walking corporate dead" - bankrupt in practice but not allowed to be on an official basis. Too bad the Obama Administration has yet to get the message...... However, the ongoing disaster has spelled the practical end of nukes, and wind energy is still between 5 to 10 times less costly than solar as a way to make mass quantities of electricity. More importantly, no private consortia will finance nukes (which cost over $10 billion per unit and take close to a decade to make). Odds are, Japan will soon see an enormous push for offshore and onshore wind energy development to replace out their nuclear and fossil fuel sourced electricity.

As for the U.S., "Pumpkin Time" (December 31, 2012) is fast approaching, and the delay in either replacing the tax avoidance based subsidies with a sane pricing system or else extending them is likely to cost 30,000 jobs, at least, starting in 2013. Until that situation is rectified, many of the remaining 40,000 people employed in the wind biz will also be endangered, as will be many of their employers. All because Republicans in general and the "teahadist" branch in particular put either their ideology (can't delay the Rapture, belief that there is no such thing as Global Warming, belief that what's good for the 1% is good for them and the rest of the country, and loyalty to those who buy and/or rent them via campaign contributions) or their belief that bringing our country to its economic knees will allow a Republican to be President and allow Republican control of the Senate and the House in the 2012 elections, above that of our country. In other words, the needs of a few outweigh the needs of the many. Well, obviously, they are no fans of Vulcan (Star Trek) morality, even if the Texas Supreme Court once was... (http://www.techdirt.com/articles/20101027/05183111607/texas-supreme-court-cites-the-wisdom-of-spock-on-star-trek.shtml)

Anyway, the official numbers will come out in early February, and they will show how the rate of wind turbine installations is still increasing (GW capacity installed per year), despite poor economic prospects. Last year, the amount of wind power installed (capacity or net produced by this new capacity) was greater than the nuke installs for 2011. In the U.S., wind turbine produced electricity is significantly cutting into sales of (and the probability of a higher price for) natural gas. The avoided gas amouts to almost 1 trillion cubic feet of methane per year, or over 4% of that consumed. And that is definitely enough gas not burned to affect natural gas prices in a major way, and one beneficial to most gas customers, too. Viewed another way, this is close to 14 x 1.1 MW nukes that did not get built, and that is a good thing, too. It sure beats having to get a full body scan for radio-isotope ingestion as will be the norm in Japan for annual doctor visits....

What would really be nice for 2012 in the wind biz is for the general public to understand the combination of the job creation potential of the mass production of wind turbines (say, at a rate of 10 times what was done this year) coupled to our country's enormous wind energy potential. Or that certain environmental organizations (it's too large a list) would join with the Sierra Club and understand the the job issue is of far more immediate importance to most Americans than is the longer term threats posed by elevated CO2 levels, or of the health effects of wide scale fracking and continued wide scale use of coal when we could be using a combination of wind energy and pumped hydro storage. Heck, maybe even the NY State government could figure out the potential of pumped hydro in NY State for Ontario, Ohio and Indiana....

Oh well, I guess a person can wish...

DB

Thursday, January 5, 2012

Macroeconomics, WNY and Wind Power

Graph by Jerome Guillet, from http://www.eurotrib.com/story/2011/12/19/121933/16

Long Introduction
Macroeconomics is so important, and generally so misunderstood, especially by right wing economists and associated business types. But rather than launch into the topic full tilt, there are a few important aspects of it that are relevant to Western New York, the US and the world at the present time, especially since we are still stuck in the effects of The Great Recession that George "Evildoer" Bu$h and Alan "Bubbles" Greenspan helped bring in and which metastasized in such spectacular and undesired fashion in the fall of 2008.

1. The present period is characterized by a lack of economic demand (alias macroeconomic demand). Increasing the supply of stuff (labor, materials, etc) will do little good and may do more harm. When the workers who make (or in our case, used to make) things cannot afford to buy them, you've got trouble, big time.

2. Our society runs on energy, among other things, and especially oil based energy (oil is used for almost all forms of transporting people and things). At present, replacement of oil usage is very difficult compared to coal, natural gas and nuke replacement, but, "ya gotta do what ya gotta do". The price of oil has been rising at an average rate of 14.6%/yr for that last 14 years, and there is no logical or truthful reason to believe this trend will do anything but get worse. And we export close to $400 billion a year to import about 10 million bbls/day. This acts as an additional regressive sales tax (and increasingly onerous one, too) on lower and middle income people. World oil prices (and US domestic oil prices) are set not by the total oil produced in the world but by the fraction of oil available for export (about 50% of total oil produced). Global Net Oil Exports are declining (a drop of 10% in the last 5 years) and this rate will accelerate as time marches on... Natural gas prices can also act like regressive sales taxes on most people, but for now, prices have collapsed. However, that situation will not last for too long, and so the more we can avoid getting hooked on natural gas (especially for electricity), the lower the demand will be and thus the lower the price will be. Lower demand is the way to keep gas prices down.

3. At the present time, if you tax rich people more and spend the money on infrastructure or in transfer payments to the poor, this will stimulate the economy.

4. If present spending levels by governments (federal, state, local) are decreased without a corresponding increase in spending by the private sector in this country, that will depress our economy; doing the opposite (increased government spending on poor and middle class people) while private spending/investment stays the same will stimulate our economy, especially since we are "macroeconomic demand deficient" these days.

5. If you tax poor and middle income people (in effect, the bottom 95% and especially the bottom 80% of the income distribution) more, or do things like raise the cost of the oil and natural gas they buy without also raising their income, this will depress the economy.

6. Income and wealth distribution does affect macroeconomic performance. A more equitable/less unequal income distribution will lead to a better performing economy (less unemployment, more GDP/person, more stability in economic performance), and a more unequal income distribution leads to a lower GDP/person ratio, higher unemployment and a more unstable economy. Greater inequality will eventually produce drastic "corrections" - more severe recessions/depressions than would happen with more equitable income distributions, and more often, too.

7. These "lack of macro demand" recessions and depressions can actually INCREASE inequality, setting up the next recession/depression, and also increasing the likelihood it will be worse than the preceding one. Bummer!

8. When income and wealth distribution become too obscene, stuff hits the proverbial fan. Drastic inequality can only be maintained by brute force and strenuous media control (Remember the book "1984"? Well, there are corporate versions of a totalitarian state, too - for example, see Naomi Klein's book "Shock Doctrine"). After all, do you want to live in abject poverty, work like a slave or worse so that some freeloading parasite of a corporate overlord can indulge in their wildest luxury fantasies (food, intoxicants, choice selection of "pleasuring opportunities", etc) just because they are a member of what radio and TV show star Ed Schultz calls "the lucky sperm club"?

9. Inequality tends to produce more inequality, especially on the rich side of the ledger. For example, when major money buys media access as well as media ownership, the media/money arrangements buy and/or rent political power, and political power helps determine income as well as wealth capture/distribution/retention, this sets up a positive (for the well off) feedback loop. In addition, when the vast majority of societal wealth is captured by a small minority for an extended period of time, well... do the math .... that means there is less for the vast majority of people.

10. People tend to resist getting further impoverished. Generally speaking, getting poorer is not one of the main ambitions in life for most people, especially since getting poorer means an increasing probability of dying earlier (medical, type of food, crime, etc) than for the wealthy, as well as a higher probability of a less pleasurable life. And if presented with the option of decreasing real wages/standard of living or taking out a loan to maintain current/prevailing living conditions, people often go the loan route, at least until they cannot pay back the loan or even just pay the debt service (interest portion of the loan).

11. When the vast majority of the population are also debtors and when they can no longer even pay the interest on those loans, those who were doing the loaning (the wealthy) have to get hosed, eventually. It's just simple math..... Unless debtors are allowed to earn more money (and hence the vast majority of the population are allowed to earn/collect a larger fraction of the national economic output), the math result will come home to roost with a rip roaring recession or depression, or worse. While most people associate the Rwanda and Bosnia civil wars and genocides with tribal and religious disputes, there also were intense economic causes for the squabbles over the local resources that may have been MORE important that the "surface cause" of religious/ethnic bigotry. After all, the "winners" get to keep the land, while the "losers" lose it all, including life itself.

12. Real wealth is created through farming, mining and manufacturing; stealing only works until the "distant hosts" have been pillaged to the point where there is nothing left to steal. Financial activities do not create wealth, they only rearrange wealth, and too much of this activity and too little real wealth creation is eventually unstable. And that appears to be where our country is at at the present time.

Short Discussion
Point #1 should be as obvious as the nose on your face. If you have problems with that one, perhaps medical help is in order, though this does PERSONALLY affect different people in varying ways. Some people are getting by remarkably well, and some businesses may be experiencing a high demand for their goods and/or services - cool. Unfortunately, for our society as a whole, we could be doing SO much better.

The data for Point #2 (and the graph below) is from the U.S. Government Energy Information Agency, and it is based on the "West Texas Intermediate" (WTI) oil price (now artificially lower than most other oil prices for some pipeline related issues). In general, most crude oil prices (especially the Brent index, which is made possible via an exchange operated by BP (British Petroleum) and Goldman Sachs) are now higher than WTI by at least 10%. The starting year (1998) is somewhat arbitrary, but prices from 1984 to 1998 were remarkably flat, and from then on, that is no longer the case. The growth rate in price is obtained by getting the slope of the best fit equation of the natural logarithm (Ln) of the price versus the year:

First Order Oil Price Rise Rate Calculation (for those not engineers or math savvy)

The lower graph is the conversion of this growth rate equation into a "normal" format, in this case price (y axis) versus time (x axis), and then projecting this onwards. On average, a 14.6%/yr growth rate for crude oil prices means that they double every 5 years. And now you can't say you were not warned! And while the graph is a bit noisy, keep in mind that it is the long term effect that you have to worry about...

Next, here is an excellent article documenting Points 3, 4 and 5. It's just plain awesome:
http://www.dailykos.com/story/2011/12/30/1049892/-Occupy-the-tax-code:-why-taxing-the-rich-will-make-the-economy-soar?via=spotlight. There is also a corresponding (and even stronger) relationship between income distribution and job creation - see http://www.dailykos.com/story/2012/01/05/1051834/-Occupy-the-tax-code-II:-exploding-the-job-creator-myth?via=spotlight. So, those yahoos promoting that "yahooey" about the rich getting richer faster will lead to more job creation than by taxing them more - that is SO "fact-free" and all that is implied by that phrase. But, that is hardly surprising....

Of course, such facts are heresy to the present Republican "economic belief system" (alias bogus psuedo-religion, and which seems to trump even the hard core Christian fundamentalism of many of them). Bottom line - taxing the wealthy while not taxing the non-wealthy at the present time is the smart thing to do. It will get more people employed, raise more tax revenue, lower Federal debts, and allow many businesses to make more profits, hire/retain people.

Next comes the income distribution problem , especially in the aftermath of asset bubble burstings - "It's the Class War, Stupid!": http://www.eurotrib.com/story/2011/12/19/121933/16. The graph at the top is from this excellent article. It shows how the asset bubble process transfers wealth from average people to the "upper echeloners". And that process as also not a good thing.

Another, more lengthy examination of this effect can be seen in a paper published by, of all entities, the International Monetary Fund (IMF), who have a long history of afflicting the afflicted/poor/working class and enriching the rich. Well, irony abounds, no doubt about it, and this is a great example of this. In general, they (the IMF and "friends") tend to fleece second, third and fourth world countries something fierce, but nowadays, looks like they are about to help impose "Austerity" on much of Europe, which will only make things worse, and further increase the debts of countries like Greece, Spain, Portugal, Ireland and Great Britain. However, maybe the ruling apparatchiks of the IMF don't read the research papers that they publish.... See http://www.imf.org/external/pubs/ft/wp/2010/wp10268.pdf. A brief description of this 30 page paper (hint: avoid the equations, stick to the writing and graphs) can be found here:
http://www.declineoftheempire.com/2011/02/inequality-debt-and-financial-crises.html.

Conclusions
So how do we stimulate demand while at the same time not stimulating significantly greater oil imports and natural gas consumption? Well, things like mass US manufacture of and subsequent installation of wind turbines, construction of pumped hydroelectric energy storage systems and installation of additional grid transmission capacity would be a start. In general, this will displace natural gas usage, but after a while, even coal and nukes will get replaced with wind. At the end of 2011, both South Dakota and Iowa were supplying an average of 20% of their electricity supply, and in parts of Colorado, more than 50% was supplied by wind for significant periods. But, that trend needs to be replicated for big load centers/population centers.

Another thing to do is making alternatives to gasoline consumption, and hence oil importation needs. This would include both electric mass transit for urban centers and also electrified freight rail for long distance freight lines (and which also provides the long distance transmission corridors from the Great Plains to the east, west, south and north coast population centers). And building new roads (for more car traffic) should not be encouraged. The prime strategy for eliminating oil imports should be to use less oil (domestic AND foreign) - less diesel for trucks, less gasoline for cars and less kerosene for jet aircraft. While domestic oil extraction and renewable fuels production is helpful, the best bang for the buck is better fuel efficient cars and avoidance of using gasoline consuming cars and diesel consuming trucks.

And finally, there is the replacement of natural gas usage. As stated earlier, the electricity generation part can be replaced by wind turbines, but what about the heating issue? It turns out that wind turbines (electricity) can replace gas used for room temperature space heating via heat pumps - groundwater sourced ones are preferable (more heat "pumped" per kw-hr consumed in the compressor). Over half of the natural gas consumption in this country can be avoided by any combination of heat pumps, passive solar thermal, better building insulation and solar hot water heaters. And that will insure that natural gas prices stay low, and thus do not add more economic woe to poor and middle income people.

Residential and commercial building heat pump manufacture can be like the car industry, too. Maybe that should be the next Buffalo target - an auto plant sized heat pump factory....

There are millions of jobs to be had for the next two decades or more with just these few examples. But to be effective, the manufacturing part can't be off-shored; imports of these need to be viewed as morally repugnant, as well as economically "stupid on steroids". The solar PV industry in particular needs to be based on made in USA PV cells/modules/systems; using Chinese slave labor and mercentilistic capital to provide "cheapies" is so unpatriotic, and such a job killer, when job creation in THIS country needs to be stressed.

And while some will stress replacement of coal burners and nukes, that can be done after the gas based plants (also most expensive) get replaced. After all, very few new coal and nukes are being installed, and are likely to be installed. Nukes are just too expensive, and they CAN go Fukushima on us. New coal burners are also expensive, and the price of coal on the east coast is just no longer predictable (Chinese and Indian purchases have added at least $30/ton onto prices in the last year). The combination of affordable electricity and job creation pretty much targets wind, geothermal, tidal, biomass and biogas as to how the bulk of our electricity needs to be made.

Oh well, that's at least two cents worth of advice. What's your opinion(s) on this? After all don't forget to

the public conversation as we certainly cannot leave that to the corporate owned media around here. Talk about a proven to be a brain deadening concept...

DB

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